Employers flout labour law by hiring illegal workers

The opening of Dutch borders on 1 May 2007 to employees from new EU Member States has not discouraged employers from hiring workers illegally. It thus remains necessary to check for illegal employment and impose fines where it occurs. By the autumn of 2007, the organisation that monitors compliance with the collective agreement for temporary agency workers had uncovered major breaches of the agreement at 33 companies and imposed fines totalling €1 million.

Illegal employment

The opening of borders on 1 May 2007 to employees from new EU Member States (NMS) appears not to have discouraged some employers in the Netherlands from hiring workers illegally. For employers, financial motives remain the most important reason for taking on illegal employees. Therefore, it remains important to continue to check for illegal employees and to impose fines. The Minister of Social Affairs and Employment, Piet Hein Donner, drew this conclusion on the basis of the findings of a study carried out into compliance with the Act on Employment of Foreigners (Wet Arbeid Vreemdelingen, WAV).

The study, which was conducted in the autumn of 2006, dates back to the phase of transitional arrangements for the free movement of workers from the NMS – that is, before the Netherlands opened its borders freely to workers from central and eastern Europe (Regional Plan, 2007, Naleving van de Wet Arbeid Vreemdelingen in 2006. Onderzoek onder werkgevers). These restrictions have since been lifted (NL0705039I). Nonetheless, work permits and the monitoring of compliance remain important, because three quarters of the employers participating in the study indicate that if the government were to discontinue monitoring compliance, they would hire foreign employees without applying for a work permit. One in three employers admit that potential fines play a role in whether they hire illegal employees.

These findings show that the checks conducted by the Labour Inspectorate (Arbeidsinspectie) and the imposition of fines play an essential role in combating illegal employment. The maximum fine for employers was increased substantially in 2005 and currently amounts to €8,000 for each worker hired illegally. The sectors of economic activity with the highest risk of detection in this regard include: agriculture, cleaning, construction, horticulture, hotels and restaurants, and meat and fish processing, as well as temporary agency work. The policy aims to reduce to 15% the proportion of employers contravening the WAV.

A form of modern ‘slavery’

The Social Information and Investigation Service (Sociale Inlichtingen- en Opsporingsdienst, SIOD), which forms part of the Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid, SZW), describes a number of cases worthy of being labelled as ‘modern-day slavery’. Moreover, SIOD underlines that this is just a small sample of the scale of the problem. For example, in one of four cases which SIOD has brought before the courts, the investigation service outlines how dozens of Bulgarian women were working in a warehouse snipping off the heads of hemp plants. They were collected at a petrol station in the evening or late at night. From there, they were crammed into a small, dark van and driven to an unknown destination. On arrival, the door was locked behind them and their cell phones were taken from them. These women were paid less than a quarter of the statutory minimum wage.

More stringent legislation has made it possible for the courts to rule against employers in cases of exploitation.

Temporary work agencies fined

In 2007, the Foundation for compliance with the collective agreement for temporary agency workers (Stichting Naleving CAO voor Uitzendkrachten, SNCU) imposed heavy fines on temporary work agencies which were found to be in breach of the collective agreement. Since the autumn of 2005, this organisation has actively monitored compliance with the agreement.

SNCU is a cooperative venture between the collective bargaining parties in the sector, including the Dutch Association of Temporary Work Agencies (Algemene Bond Uitzendondernemingen, ABU) on behalf of employers, and the Allied Unions (FNV Bondgenoten), the Services Workers’ Union (CNV Dienstenbond) and the Dutch General Independent Union (De Unie) on behalf of employees. The reporting desk at SNCU is already handling 400 cases, and as many as 135 temporary work agencies are currently under investigation. Inspections have been conducted at a total of 65 companies, and 33 cases of serious breaches of the collective agreement have been uncovered.

The most commonly occurring violations pertain to incorrectly applying provisions of agreements in respect of leave entitlement, holiday allowance and net hourly wages – if these provisions are applied at all. Failing to pay for overtime or irregular hours worked is also common. SNCU set total damages for temporary agency workers affected by such irregularities at a total of €9 million. The organisation can claim damages with retroactive effect from the companies involved to compensate for the violations. This does not include the figure for fines imposed, which totalled €1 million by the autumn of 2007. The fines vary for each company, starting from €5,000 and reaching a maximum of €100,000.

Marianne Grünell, Hugo Sinzheimer Institute (HSI)

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